Gentoo in talks to expand deposit-free home-buy scheme Genie

Gentoo is seeking to further develop its innovative Genie product, which is helping hundreds onto the property ladder

Left and centre, Peter Walls and John Walker of Gentoo
Left and centre, Peter Walls and John Walker of Gentoo

Wearside developer Gentoo is engaged in talks with the Treasury to expand its pioneering home purchase scheme following a strong year which saw turnover top £209.4m.

The Sunderland-headquartered company launched its Gentoo Genie product in 2011, to give people an opportunity of buying their own home without saving for a mortgage deposit.

The scheme was the brainchild of chief executive Peter Walls, the resulting scheme allowing Genie customers to choose a home from a selection of new properties, pay a monthly fee and have total payments fixed for each five-year period.

Now the firm’s chairman John Walker has revealed how the firm is keen to further develop the project, in a detailed report accompanying accounts for the year ended March 2014.

Mr Walker said: “The wider business environment is now starting to recover from recession but this has also led to a significant reshaping of the economy with the public sector continuing to rationalise as a result of austerity measures.

“We continue to develop our Genie product with further discussions taking place with institutional investors and the Treasury.

“Our input to both the Lyons review of housing and the Government’s Review of Local Authority Housing Supply has made the point that more radical approaches to land use, equity share and investment will be needed in order to address the chronic shortage of new housing supply.

“We believe that innovative approaches such as Genie can be central to the reinvention of the property supply model and will therefore continue to develop the Genie approach and concept.”

The latest accounts reveal a 19.6% lift in turnover from £175.19m to £209.46m, and gross profit also increased to £145m from £128m. Surplus operating profit, meanwhile increased from £26.6m to £28m.

Despite the rise in surplus operating profit and revenues, chief executive Peter Walls said the performance had been mixed across the group, with Gentoo Construction and Gentoo Homes doing well as demand has grown, compared to weaker performance by construction arm Astley Facades Group, acquired by the business in 2012, and glass manufacturer Romag, acquired in 2011.

As a result, Astley has been brought under the management of Gentoo Construction and Romag – which last year won a contract with Hitachi Rail Europe – will focus on its more profitable business streams.

The group has launched a number of new homes developments in 2014, with sites across the region stretching from Guisborough to Prudhoe. In the last year seven new developments and six new show homes have been launched, helping 83 new customers into affordable homes.

Mr Walker added: “Construction and development are now starting to see recovery from the low point of a very deep recession.

“We are now seeing the effects of that in Gentoo Homes and Gentoo Construction who are now both securing new work and generating surplus for the group.

“Sales have been boosted by the Help to Buy programme but we will continue to be cautious in our approach to new housing markets.”

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer